A-B LOSES FIGHT FOR TV ADS DURING 1998 WORLD CUP: EC REFUSES TO OVERRULE FRENCH LAW LIMITING ALCOHOL SPOTS

[paris] The executive body of the European Union last week refused to strike down a French law banning alcoholic-beverage advertising, casting serious doubts over what benefit Anheuser-Busch Cos. will get out of its estimated $10 million sponsorship of the 1998 World Cup soccer championship in France.

The European Commission shelved A-B's formal complaint against France's Evin law, which bans all tobacco advertising and drastically restricts ads for alcoholic beverages, including beer.

Under the TV ad ban, French channels also are not allowed to broadcast events if the brand names of alcoholic beverages or tobacco are on display, including stadium signage. French TV networks will provide the images of the soccer games to be broadcast worldwide, but must prevent signage for A-B brands such as Budweiser from being seen.

FRANCE HIGHER STANDARD?

In addition to jeopardizing A-B's participation, the European Commission's decision-that the French law does not violate European Union rules on free trade and circulation of goods-risks setting France's tough national ban as a higher standard of restriction that other nations will have to adhere to as rules in different EU countries are increasingly harmonized.

`A BIG BLOW'

"This is a very big blow," said Jacques Bille, president of the European Advertising Tripartite, which represents agencies, media and advertisers, and supported A-B's case. "Although we have not given up the fight to have the Evin law condemned as conflicting with EC policy, there is a real chance that the commission's decision will make it the reference rather than the aberration."

In fact, the commission's decision was actually a refusal to decide; rather than ruling on the case, it simply filed the complaint away, leaving the French law unchallenged.

A-B, in the absence of any official notification of a decision by the European Union, is refusing to comment.

It is unclear whether the company can or will still try to withdraw from the sponsorship deal or seek some kind of compromise with the French government.

"I don't know the details involved, but I know Busch signed a contract to become a partner," an insider commented. "Because of this, I don't know if they can pull out anymore."

According to the insider, ideas have been proposed for displaying A-B brand names in the stadium out of camera shot. Some of them, like one suggestion to fly remote-control balloons bearing A-B brand names around the grandstands, "were more examples of comedy than marketing," he said.

A HIGH-TECH ALTERNATIVE

Another possibility may be to use TV software called Epsis, developed by France's Lagardre Group, to allow different images or brand names-or even blank spaces-to be broadcast to different markets.

The 1998 World Cup's other sponsors, including Adidas, General Motors Corp. and Hewlett-Packard Co., will enjoy TV exposure through stadium banners, special promotional activities and booths at each game.

"I truly hope that some solution is found," Mr. Bille said. "France is really embarrassing itself with this, and risks alienating a lot of advertisers."